The UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC), is seeking a blockchain analytics tool to track cyber crooks using cryptocurrency.
HMRC wants to dissect transactions made using cryptocurrencies under the belief it could identify criminals using them for trading purposes.
Specifically, there are seven digital assets it wants to analyse, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ethereum Classic, XRP, and Tether.
While the tax authority believes these cryptocurrencies are increasingly being used for legitimate purposes, it claims they’re also the main offenders when it comes to “tax evasion and money laundering”.
A commercial product
HMRC notes that while online tools and human analysis of raw blockchain data can help shed light on these transactions, it believes investing in a commercial product would enable its investigators to close “intelligence gaps” regarding how “the trade of cryptocurrencies is currently supporting criminal activity against HMRC”.
“Many of these crypto-asset transactions are recorded publicly in a ledger known as a blockchain,” the tax firm said.
“Whilst the transactions are typically public, the participants undertaking them are not.”
PublicTechnology reports that HMRC is prepared to spend £100,000 to license the tool and will be inviting proposals from possible suppliers until January 31, with an anticipated contract start date of February 17.
“The successful service provider must have relevant people, suitable assets, and deep experience,” said HMRC.
“Critically, we will be looking for vendors to showcase their capabilities by demonstrating their expertise in the field of crypto-asset trading.”
The tax authority will also look to extend the reach of the tool to privacy coins such as Monero and Zcash in the future.
Interested in reading more HMRC-related stories? Discover more about what the UK’s tax authority’s latest cryptocurrency taxation guidelines mean with Coin Rivet’s guide.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.